Founded in 1992 by senior executives with entrepreneurial, line operating, and bulge bracket investment banking experience.
During the month of March 2010, Avalon, as the sole placement agent, raised Frederick's of Hollywood Group Inc. $3mm in common stock and warrants.
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Qualified Small Business Stock
Stock of qualifying domestic C corporations as defined under Section 1202 of the Internal Revenue Code. To qualify, a corporation's gross assets cannot exceed $50 million (on a tax basis), and at least 80 percent of the company's assets by value must be used in the active conduct of one or more qualified trades or businesses. Section 1202 does not apply to S corporations, limited liability companies, or limited partnerships. Qualified small business stock held for at least five years qualifies for a reduced long-term capital gains rate on sale and is also the beneficiary of certain preferential rollover treatment after a holding period of six months.
Qualifying Initial Public Offering
An Initial Public Offering that exceeds certain minimum standards. These standards are contractual set to protect preferred stockholders from having to convert from preferred stock to common stock in connection with an IPO that is too small creates an insufficient public float or has no meaningful public market or liquidity for the investor. The standards frequently include one or more of the following: (i) a minimum aggregate dollar amount (gross or net); (ii) a specified stock price (e.g., greater than $5); (iii) a high-quality underwriter (e.g., national underwriters); or (iv) an agreed trading market or exchange (NASDAQ, New York Stock Exchange, or American Stock Exchange).
Quarterly Report (10 Q)
A report that all public companies must file quarterly with the SEC.
Ratchet Provisions
See Antidilution Provisions and Full Ratchet Antidilution provisions.
Recast Financial Statements
Proforma Financial Statements or reconstructed past and current financial statements of a business to adjust for specified changes. Financial statements of companies offered for sale are often recast to take out excessive owners’ compensation and related expenses.
Redeemable Preferred Stock
Preferred stock that must be redeemed by the company at a fixed time and fixed amount. Redeemable preferred stock is behind debt and ahead of common equity in the order of repayment on sale or liquidation. Unlike Convertible Preferred Stock redeemable preferred stock is not convertible.
Redemption
The voluntary or mandatory repurchase of a security by the company that issued the security. State laws vary but usually limit the amount of stock that can be redeemed by a company based on an amount that will not render the company insolvent or impair the company's capital.
Registration Rights
The right of an investor to have restricted securities registered with the SEC. Registration rights are either demand registration rights or piggyback registration rights. These rights are desirable for investors even after an IPO because an investor may not be able to sell large amounts of restricted securities quickly because of securities laws, restrictions, or market conditions.
Registration Statement
A disclosure document filed with the SEC in connection with registering specific securities under the federal securities laws. A registration statement includes mandated financial and narrative information, including the prospectus.
Regulation D
The SEC safe harbor rules governing the terms and conditions for certain private placements whose initial sale is exempt from SEC registration requirements, including Rule 506 offerings.
Regulatory Environment
The amount of government oversight of a particular business.
Required Rate of Return
The rate of return that an investor looks for from an investment to compensate for the amount of risk involved. A higher rate of return is demanded for higher risk ventures.
Restricted Securities
Securities sold in a private placement which cannot be resold except pursuant to a registration statement or an applicable exemption from SEC registration such as Rule 144.
Retained Assets
Assets kept by owners after completing of the sale of a business.
Retained Earnings
An equity capital account that measures a company's accounting earnings that are retained for reinvestment in its operations and not paid out as dividends.
Return on Equity (ROE)
As an indicator of profitability that is derived by dividing Net Income by Stockholders' Equity. Investors use ROE to measure how well a company is using its capital.
Return on Total Assets
The ratio of Net Income to total assets.
Reviewed Statement
A financial statement prepared by a CPA which has more testing than a compilation statement but less than an audited statement. A reviewed statement indicates the CPA believes that no material modifications need to be made to the financial statement in order to conform to GAAP.
Right of First Refusal
See Preemptive Rights.
Risk
The degree of uncertainty about the outcome from a given event or investment in a security or a company.
Risk Premium
The premium associated with the additional risks of a particular investment compared to a so-called risk free investment, commonly federal government bonds.
Roll-up
A Merger or acquisition transaction where several individual entities are combined to create a larger entity.
Rounds
Successive separate private placements by a company. The initial private placement from institutional investors is often called the first round of financing. Later private placements are designated as the second round, third round, and so on. The last round prior to a public offering, is generally referred to as a mezzanine financing if conducted for the purpose of providing the company with enough cash to operate until the IPO takes place. See Angel Round.
Rule 144
The SEC rule that governs the resale of restricted securities (i.e. private placement securities) not sold in connection with a registered public offering. Rule 144 sales are subject to certain notice requirements and sale restrictions. A person not affiliated with the issuer who has beneficially owned restricted securities for at least one year is generally entitled to sell, within any three-month period, a number of shares that does not exceed the greater of one percent of the then outstanding shares of common stock, or the average weekly trading volume in the common stock during the four calendar weeks preceding the date of the notice of sale that is required to be filed.
Rule 144
The SEC rule that governs the resale of restricted securities (i.e. private placement securities) not sold in connection with a registered public offering. Rule 144 sales are subject to certain notice requirements and sale restrictions. A person not affiliated with the issuer who has beneficially owned restricted securities for at least one year is generally entitled to sell, within any three-month period, a number of shares that does not exceed the greater of one percent of the then outstanding shares of common stock, or the average weekly trading volume in the common stock during the four calendar weeks preceding the date of the notice of sale that is required to be filed.
Rule 506 Offerings
Private placements conducted under SEC Rule 506, which can be sold to an unlimited number of accredited investors and are unlimited in dollar amount.
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